State Wants Grant Money Returned; Callahan: Town Hit with Bill of Almost $1 Million

Article excerpt

State officials are demanding Callahan return almost $1 million in grant money, including a $550,00 grant the town received to renovate low-income housing.

Callahan, however, has only $565,000 in all its accounts, Mayor Shirley Graham said, so the town couldn't refund the money even if it ceased operating.

While Callahan officials disagree with some Department of Community Affairs findings, they say the best hope is to negotiate with the department to forgive all or some of the debt.

"We have been in contact with the DCA, and hopefully we'll meet with Secretary Colleen Castille or her administrative aide to try to work this out and not have to pay this back," Graham said.

At issue is the town's administration of two DCA grants. Former Zoning and Building Administrator Bobbi Boone, who also was grant administrator, handled the grants. Boone was charged in April with four counts of grand theft involving grant administration.

The first DCA grant is a $550,000 Community Development Block Grant Callahan received in 2000 to rehabilitate 20 homes owned by low- to moderate-income residents. The second, received the same year, is a $1.58 million "El Nino" grant earmarked for drainage improvements.

In a Sept. 17 letter, DCA officials said staff learned during visits to owners of nine of the 12 homes refurbished with grant funds that Boone and then-Council President Jack Sikes had contacted a majority of recipients directly and encouraged them to apply for the grants. Town staff couldn't provide any proof that the town placed newspapers ads to solicit applications, which was required by the town's housing assistance plan so that more qualified homeowners would have been aware of the available assistance.

"The practice of direct notification indicates clients were handpicked and/or preselected and is a violation of local policy, the purpose of which is to ensure fair competition among all low- to moderate-income residents for CDBG rehabilitation services," Department of Community Affairs Financial Specialist James Austin wrote.

DCA monitors also said that instead of correcting housing code violations, much of the work consisted of home improvements like painting or new carpeting, even though in some cases the owners said there was nothing wrong with the old carpet. …